RTD says frequent riders should pay the highest prices

With the new year came a fare hike for transportation in the Denver metro area, including Boulder County. At $3 for a single ride (valid for unlimited transfers for three hours), RTD now has the highest fares in the country, more expensive than San Francisco and New York, cities with larger populations and higher costs of living. The closest in price is Dart in the Dallas metro area, which charges $2.50 for a single bus ride or $3 for morning and afternoon unlimited passes. In Colorado’s largest metropolitan area, it now costs $10.50 for a regional day pass and to get to DIA.

Pass programs, including the EcoPass and CollegePass, also saw fare changes under the new policy. Now, some of the largest users, be it downtown employees, neighborhoods or the University of Colorado Boulder, could see a doubling of rates over the next three years, which could not only threaten the pass programs but also the City’s ability to reach its climate goals.

Even so, there are some benefits to the fare changes. The 2019 fare increase was the result of a year-long pass program study and working group made up of 25 representatives across the metro area, including Boulder County. (RTD’s policy is to revisit fares every three years; the last time it raised fare prices was in 2016.)

“It was a consensus, but it wasn’t a happy consensus, and I guess that’s what happens when you get to consensus,” says Boulder City Council member Mary Young, who was part of the working group. “Everybody gets something, nobody gets everything.”

Young says that a large incentive for agreeing to the new fare structure was to offer discounted fares to those who really need it: youth and low-income populations. Before, “those who really needed the discount, those who need the bus to get around, were paying full fare,” she says, comparing those in need to those with various passes who receive discounted fares.

Starting in January, RTD instituted a youth pass, offering a 70 percent discount for those between the ages of 6 and 19, regardless of whether or not they are enrolled in school. (Previous student passes were discounted at 50 percent and required proof of enrollment.)

Additionally, a new income-based pass (LiVE Pass) is set to launch later this summer. It will provide a 40 percent discount for people making an annual income of approximately $23,000 for an individual or $47,000 or less for a family of four (185 percent of the federal poverty level). In order to offer these discounts, RTD asked for concessions elsewhere and it comes with the reconfiguring of other pass programs, specifically the EcoPass and CollegePass, both widely used by employees, residents and students in Boulder County.

“There was a balancing act between how much did the regular fares go up in order to provide more affordable mobility for those who really need it,” says George Gerstle, recently retired director of transportation for Boulder County.

According to RTD, the fare changes are a way of “right-sizing” transportation costs, and other transit agencies around the country are expected to raise prices soon as well. Revenues from fares make up about 12 percent of the agency’s annual budget, while the lion’s share (approximately 52 percent) comes from sales and use tax revenue.

“We already are heavily subsidizing moving people around,” says Pauletta Tonilas, general manager of communications for RTD. “But there is a cost to it and people are being asked to pay their share for the benefit of riding transit.”

Transportation officials at the City of Boulder, however, worry that raising the costs of transportation will inhibit some riders’ ability to afford it. Couple that with decreasing service in some areas, and it could threaten both ridership and vital pass programs. Likewise, the University of Colorado is expected to be hit hard by the increase.

Before the 2019 fare increases, CU, businesses and neighborhoods were given a flat rate for the EcoPass and CollegePass, determined by location and number of users. Now they will be priced based on how much they are used (utilization), i.e., the more people from any one group who ride RTD, the more that same group will be charged. This may cause some pass prices to decrease, but most passes are expected to increase significantly. In order to spread out the increase over time, RTD agreed to a 20 percent increase in the first two years (2019 and 2020), with any remaining increase captured in 2021 prices.

Joel Dyer

Since its inception, the EcoPass program has only continued to grow and has paid for itself, according to RTD. Still, the agency maintains, this “right-sizing” of costs is only fair and will still be cost-effective for the user.

“Asking people to pay for what they’re using, that is a hard pill to swallow initially, potentially,” Tonilas from RTD says. “But I think that everybody understands that it is equitable and fair to be paying for what you use.”

But according to City staff in the transportation department, the price hike changes the very nature of the EcoPass program and has the potential to threaten both its sustainability and viability.

Chris Hagelin, senior transportation planner with the City of Boulder, says that the City has been talking to RTD about moving toward the utilization model for about a decade, but with the assumption that there would still be a discount for the EcoPass program.

Now, “mostly due to RTD’s financial situation, they basically said we’re going to use pricing utilization with zero discounts,” he says. “We certainly wanted to actually have data and pricing based on data but we just always assumed that these discounts would be built in.”

Take the downtown EcoPasses for example. Everyone who works in downtown Boulder is given an EcoPass as a way to reduce congestion by in-commuters coming from other parts of the city, county or region. The passes are paid for out of the Central Area General Improvement District (CAGID) — revenue from charging for downtown parking — which also funds the maintenance of the parking structures and the downtown streetscape, including the Pearl Street Mall. Under the past pricing structure, downtown EcoPasses cost CAGID about $1.1 million annually, according to the City. That price tag is projected to reach $2.3 million by 2021 with RTD’s right-sizing.

It’s counterintuitive, says Kathleen Bracke, interim co-director of public works for transportation at the City of Boulder. “It takes the bulk discount out of the foundation of it,” she says.

Bracke says CAGID, which is administered by the City, can cover the price increase both this year and next, but the City is concerned about the potential “balloon payment” in 2021, and there may need to be reductions or reprioritization discussed in the 2021 budget to cover the cost. “It’s a huge financial hit to that district,” she says. “We’re very concerned about the price increase in the third year because it goes up so much.”

The changes are also affecting the Neighborhood EcoPass program that the City helps negotiate and subsidize. Under the old model there was a per-household charge — the City provided a subsidy (anywhere from 30-36 percent depending on income levels and percentages of affordable housing in a neighborhood), the neighborhoods paid the rest — and residents were allowed unlimited rides on RTD. With the price structure change, the neighborhoods will be paying for every ride they take.

“You’ve lost the unlimited use incentive, that’s the main difference,” Hagelin says. And while it “still is a good deal,” he says, “it’s just not what it was.”

In 2019, 78 percent of neighborhoods saw an EcoPass increase, while others went down based on 2017 utilization. Some neighborhoods, but not all, will continue to see fares increasing until 2021, even as the City is committed to continue with its subsidies. While every neighborhood was able to renew for 2019, like the downtown EcoPass program it could become increasingly difficult to fund in the future, according to City staff.

Joel Dyer

“This is a fundamental part of our transportation package. We’re trying to increase people’s access to transit as much as we can,” Bracke says. “And so we want to find a more affordable way to manage the price increase of the EcoPass going forward.”

Bracke and Hagelin both point to the fact that while the City is going to be hit hard by the changes to the EcoPass program both for businesses and neighborhoods, the University of Colorado Boulder is going to experience an even larger impact.

First of all, CU provides an EcoPass to all of its faculty and staff, which currently sits at 9,615 employees. In 2018, the per-employee EcoPass price was $133. By 2021, it could reach $250 per employee, according to Kim Calomino, director of local government and community relations at CU. That’s approximately a 95 percent cost increase over three years.

Even more concerning to the University, however, is the fare increase for the CollegePass, which is given to all current students. Paid for by the students as part of their annual fees, the CollegePass program had been heavily discounted. Now, like the EcoPass, it will be calculated based on ridership.

“It’s sort of counterintuitive for an organization trying to increase ridership and expand the use of public transit [to change it so] the more people use it, the more expensive it becomes,” Calomino says.

The CollegePass is part of an overall transit package offered to students, and for the past several years, Calomino says, the fee has hovered around $170. Taking into consideration the fare increases based on utilization, she says, the fee could increase up to $225 by academic year 2020-21.

Both Calomino and City staff admit that the switch in pricing model was agreed to by the pass program working group, including representatives from their respective organizations. Regardless, there’s widespread concern that the increases, especially in 2021, could threaten the viability of the pass programs altogether.

“We have gone to [RTD] with a collective voice from the City of Boulder, Boulder County and the University of Colorado to say, these are our concerns and we need help. We need some relief from these price increases,” Bracke says. “I think that RTD is hearing from a broad base of stakeholders that this is not financially feasible.”

Both CU and the City have asked RTD to consider instituting the price increases over five years instead of three, to avoid that third-year balloon payment. They’ve also asked for intermittent independent audits to ensure the fares accurately reflect ridership. “The only data that we have is data that RTD collects and provides. And since it’s their data and they are billing us based on their data we would like some assurances as to its reliability,” Calomino says. And like the City, CU is looking for other cost savings within its budget to offset transit cost increases. They also may need to consider other solutions aside from RTD to meet transit needs.

Joel Dyer

Overall, there are more than 80,000 people who live and work in Boulder that are currently eligible for an EcoPass or CollegePass, and ridership has remained fairly stable throughout Boulder County. Additionally, ridership on both the Flatiron Flyer carrying commuters from the south and the Flex service coming from Fort Collins is growing. But this could all change if passes become cost-prohibitive for students, businesses and neighborhoods. Not only that, but RTD has continued to cut service on certain routes, which further threatens ridership. “To expect people to pay more to ride and have less frequent service is really not a good customer service model, or a financial model,” Bracke says.

From RTD’s perspective, however, asking riders to pay for the transit they use is only fair, and they expect people throughout the metro area to continue using RTD services.

“[You] get into the groove of taking transit and even though the costs will go up slightly, you’re still going to take transit because it’s your preferred way to get around,” Tonilas from RTD says. “If I like milk, and the cost of milk goes up, I’m going to still buy the milk because I want to drink milk.”

For now, both the City and the University are committed to figuring out how to keep both the EcoPass and CollegePass programs going, not only to encourage transit use in hopes of easing congestion, but perhaps more importantly to lessen the impact of transportation on the environment and air quality. In short, if rising costs threaten transit ridership, it could prove detrimental not only for the City’s transportation goals but for its climate goals as well.

Transportation accounts for 28 percent of Boulder’s greenhouse gas emissions, and the City has aggressive climate goals, hoping to reach an 80 percent reduction by 2050. In light of recent climate reports, the hope is to get there even sooner. Hagelin says that if someone has an EcoPass they are nine times more likely to ride public transportation. Additionally, RTD pass holders are likely to walk and bike more. If the whole point is to get people out of their cars, then the EcoPass becomes essential.

As Hagelin puts it, “if we’re going to see a decline in [EcoPasses] on top of decline in transit service, we’re not going to meet our city transportation goals. And then we’re going to have a hard time meeting our greenhouse gas reduction goals.”